By Mimosa Spencer
PARIS (Reuters) -Investors dived back into top luxury shares on Friday, adding some $70 billion to their market value as LVMH's latest sales figures reassured investors about the sector's resilience to economic headwinds, particularly in China.
The buying spree helped recoup some of last year's losses after China's economic revival proved lacklustre following the lifting of COVID-19 restrictions.
Shares in LVMH jumped as much as 11%, adding about $30 billion to its own stock market value and boosting peers of the French luxury giant including Kering (EPA:PRTP) and Hermes.
That helped lift the pan-European STOXX 600 index to its highest level in two years.
LVMH, the world's biggest luxury group and owner of brands including Louis Vuitton, Christian Dior, Hennessy and Tiffany & Co (NYSE:TIF), posted a 10% rise in fourth-quarter sales over the end-of-year trading period, reassuring investors who had grown skittish about the industry's prospects following its previous update in October which showed sales growth had slowed.
LVMH Chairman and CEO Bernard Arnault said on Thursday he was happy with the company's current growth rate.
With its latest report, LVMH should «steady nerves in the near term», Jefferies analyst James Grzinic wrote in a note.
For many investors, LVMH's resilience was reason enough to buy back into the sector again.
With LVMH set for its best day since 2009, shares breached technical resistance levels and investors with bearish bets rushed to cover short positions.
LVMH's relative strength index (RSI) hit 72 on Friday afternoon, its most overbought level for a year.
CHINESE DEMAND
Appetite from Chinese shoppers for European fashion brands has been a key source of concern for investors
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